Crime-Fraud Exception to Attorney-Client Privilege

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In In re Campbell, 13 Fla. Law W. Fed. B183 (Bankr. M.D. Fla. 2000), debtor filed an objection to creditor’s motion to compel production of documents filed against debtor’s counsel. Debtor asserted the attorney-client privilege, attorney work product. The Creditor alleged that non-exempt assets were converted to exempt assets with the intent to hinder, delay or defraud creditor and the privilege fails under the crime-fraud exception to the privilege. Id.

The crime-fraud exception is associated with a client who consults a lawyer for advice for a fraudulent undertaking. Id. at 10, SeeIn re Warner, 87 B.R. 199 (Bankr. M.D. Fla. 1988). If advice is obtained with respect to past crimes or misconduct then it is privileged. However, advice sought in contemplation of commission, prior to commission, or during commission of a fraudulent undertaking prior to the commission of a fraudulent event then it is not privileged. Id. at 10.

To invoke the crime-fraud exception to the attorney-client privilege a two part test must be met. First, a party must provide, “prima facie evidence showing that the client was engaged in criminal or fraudulent conduct when he sought the advice of counsel, that he was planning such conduct when he sought the advice of counsel, or that he committed a crime or fraud subsequent to receiving the benefit of counsel’s advice” Campbell, 13 Law. Law W. Fed. B183, 9-10 citing In re Grand Jury Investigation (Schroeder), 842 F.2d 1223, 1226 (11th Cir. 1987). Second, the party must show that the attorney’s advice was obtained in furtherance of the criminal or fraudulent activity or closely related to it. id.

The Court in Campbell, found that the crime-fraud exception to the attorney-client privilege applied. The Creditor did raise sufficient inferences that the transfer may have been fraudulent. The Bankruptcy Court concluded that the Creditor was entitled to certain documents that might be part of a fraudulent plan

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